Argentina: Bill To Reform The Civil And Commercial Codes

The effect of the Civil and Commercial Codes, which have
been in force in Argentina for more than one and a half centuries,
appears to be coming to an end.

For more than eighty years there have been attempts to implement
a comprehensive reform encompassing in the main the Civil Code, and
in the latest drafts a unification of civil and commercial
obligations. But in practice in all these years only partial
legislative reforms have been implemented – which are
undoubtedly important to update legislation – that have,
however, maintained the original roots of both Codes, adopted in
the second half of the 19th century.

The latest attempt, lead by the Chairman of the Supreme Court of
Justice, Dr. Ricardo Lorenzetti, accompanied by more than one
hundred specialists and university professors, has resulted in the
preparation of a single body of rules regulating the principal
institutions of private law.

Is this an innovational reform? In some aspects, the answer
could be yes if we consider that several important aspects of civil
and commercial law could now have legal ranking. However, a
significant part of the proposed amendments has already been
received in prior drafts and in the contributions of case law,
which has had to respond to a variety of new problems and
conflicts, and also in the debates and conclusions of congresses
and seminars where the principal specialists in private law have
gathered.

The preliminary draft of reforms is currently being considered
by both Chambers of Congress. This will first be carried out by
means of the intervention of a bicameral commission which will
collect all comments and remarks from a range of sectors of civil
society; and later by consideration of representatives and
senators, who shall have to approve the final text.

Although different sectors have opposed the preliminary draft
because it has not been sufficiently circulated for consideration
by academic and university sectors and in general among lawyers.
The truth is that rarely has there been so much interest and
repercussion from specialized magazines. On a daily basis it is
possible to read one or several works from specialists commenting
on and analyzing various subjects relating to the proposed reform
in the principal legal publications.

Such interest in the preliminary draft is justified. Were it to
be enacted into law (it seems that this will be its fate in the
short term), thee two codes most extensively applied in Argentina,
with a total of approximately five thousand sections currently
regulating on a separate basis civil and commercial matters
(including their amendments), will be replaced by a single code
containing 2,671 sections. Moreover, the new Code applies a
different methodology, which is closer to the one that has been
used for many years at universities.

If we focus on the contents of the preliminary draft, even at a
first glance we will notice that there has been an attempt to give
legal coverage to principles that have constitutional hierarchy:
the rights of children, disabled persons, consumers, women and
environmental property.

The aspects that have been subject to further debate relate to
family law. Although some of the proposals are already in effect by
means of the same-sex marriage law, progress has been made in the
regulation of concubinage relationships and in new provisions
relating to filiation derived from assisted human reproduction
techniques. Adoption is also subject to a new analysis, together
with procedural rules that seek to facilitate the process.

Many of the proposed reforms will undoubtedly have an impact on
different economic activities, including as a result of regulation
of assets in marriage, which will confer different perquisites on
spouses in connection with the management of their property and the
right to choose between the community property regime, which is
currently in force, or the separate property regime, which is
incorporated as an innovative alternative.

In the field of property law, which has a particular impact on
the business world, the proposed reforms regulate the abusive
exercise of rights (including abuse of dominant position) and a
special point is made of good faith as a necessary condition for
the valid invocation of rights.

Clearly priority is given to general and community interest by
means of the protection of collective incidence rights, public
order rules within the framework of contracts and consumer rights,
and the restrictive interpretation of adhesion contracts.

General rules applicable to all private legal persons have been
proposed, where the responsibility of those administering them is
regulated. By means of a supplementary law, reforms to the business
companies' law have been projected, and the distinction between
civil and commercial companies has been eliminated.

Regarding contracts, contractual negotiations are regulated, as
well as the responsibilities derived therefrom, preliminary
contracts and letters of intent, establishing a distinction between
private instruments – signed by the parties – and the
so-called "particular" instruments that are not signed
but that in certain circumstances may be used as evidence.

As well as the classical contracts which are regulated by the
legislation in force others have been incorporated such as supply,
agency, concession and franchise, factoring and association
contracts (sharing agreements, collaboration groups, joint ventures
and cooperation consortia), and several forms of bank contracts,
assignment of a contractual position and arbitration.

A noteworthy reform is projected in connection with civil
liability. The distinction between contractual and tort liability
is eliminated and stress is made not only on damage compensation
but on the prevention thereof. For this purpose judges are
empowered to issue preventive measures and also dissuasive
penalties where collective incidence rights are at stake.

It is also acknowledged that liability for property risk
includes those who obtain a profit therefrom and whether the
activity generating the damages may have been recognized by the
administrative authority is irrelevant.

The volume dedicated to in rem rights incorporates new
categories, such as surface rights, indigenous community property
and real estate developments (country clubs, cemeteries, etc.), and
also updates regulations on condominium ownership.

Probate has also been reviewed, by acknowledging wider rights to
dispose of property where there are forced heirs (descendants,
ancestors and spouse). In this case, the reform seeks to give more
certainty to the rights acquired from third parties on a gratuitous
basis.

The last volume of the draft regulates the expiry of obligations
upon the running of a statute of limitations, setting forth as a
general rule a shorter period (five years), and considers the
forfeiture of rights on a separate basis.

The draft ends with the incorporation of general and special
rules on private international law, which deal not only with the
law applicable in situations relating to several legal systems, but
also with the international jurisdiction for the settlement of
conflicts relating to the main subjects comprising the draft of the
reform.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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